Leviäkangas, P., Pargar, F., Sirvio, K., Khabbaz Beheshti, B., Love, P. (2019) Service Value and Componentized Accounting of Infrastructure Assets. Journal of Infrastructure Systems, 25 (3), 04019025. doi: https://doi.org/10.1061/(ASCE)IS.1943-555X.0000497
Service value and componentized accounting of infrastructure assets
|Author:||Leviäkangas, Pekka1; Pargar, Farzad2; Sirviö, Konsta3;|
1VTT Technical Research Centre of Finland Ltd., Kaitoväylä 1, P.O. Box 18021, Oulu FIN-90571, Finland
2Industrial Engineering and Management, Faculty of Technology, Univ. of Oulu, P.O. BOX 8000, Oulu FI-90014, Finland
3Sirway Ltd., Töölönkatu 1, P.O. Box 335, Helsinki FIN-00250, Finland
4Dept. of Chemical Engineering, Curtin Univ., GPO Box U1987, Perth, WA 6845, Australia
|Online Access:||PDF Full Text (PDF, 1.4 MB)|
|Persistent link:|| http://urn.fi/urn:nbn:fi-fe2019081424131
American Society of Civil Engineers,
|Publish Date:|| 2019-08-14
Asset management is a strategic tool for maintaining the value of an asset at a level that is satisfactory for users, asset owners, and taxpayers. This paper introduces the concept of service value. The concept is applied following the recommendations of the Organisation for Economic Co-operation and Development (OECD): service value equals the value of economic benefits generated by an asset. It is shown how alternative value accounting methods result in different asset values. The present value method, as recommended by accounting practitioners and in line with the concept of service value, is more appropriate for asset management purposes than the perpetual inventory method (PIM), despite the fact that the latter is more widely used. The impact of correct asset and service value accounting extends well beyond project and investment program management levels to the national accounting system of fixed capital. Incorrect asset management accounting may lead to serious under- or overestimation of investments and repair debt.
Journal of infrastructure systems
|Type of Publication:||
A1 Journal article – refereed
|Field of Science:||
222 Other engineering and technologies
The Finnish Transport Agency is acknowledged for providing support for the initial stage of this study in 2017.
© ASCE. This work is made available under the terms of the Creative Commons Attribution 4.0 International license, http://creativecommons.org/licenses/by/4.0/.